Why Business Agility Is the Key to Long-Term, Strategic Success

Imagine, for a moment that you’re playing a game of chess. (I work for a company whose CEO has a close affinity with the game, so this is an obvious choice of analogy for me.) Is taking a cautious, conservative route and reacting on a move-by-move basis the best way to defeat your opponent? Or is it to think of the game as a whole, considering the best moves you can make to anticipate your opponent’s strategy and expose any weaknesses you see?

I hate to break it to you, but if you fall into the former camp, you’re probably not a very successful chess player — but that probably isn’t news to you. However, if you identify with the latter approach, you may be interested to learn that many of the same behaviors also define what makes for long-term business success.

Anyone in a business leadership position will tell you it’s always more important to be a good strategic thinker, beyond just being reactive and tactical. Which makes it all the more surprising that so few seem to be putting this philosophy into action.

Commit to Business Agility

What if I told you that embracing change could make your business more effective, more profitable and improve engagement with your customers? Well, the truth is it can — if you are willing to commit to business agility.

Agility has a number of definitions within the business context, but for our purposes, I’ll define it thus: “a dynamic state of readiness that empowers an organization to balance speed and stability through operational discipline, adaptive leadership and smart technology to rapidly exploit change and complexity.” In other words, being agile means having the ability to be flexible and to react nimbly and quickly to changes within one’s environment. You might think this capability would be fundamental to any business, after all, any business that reacts slowly to change will surely be left behind in the slipstream of its competitors.

Risk-Averse Behavior Is Holding Companies Back

It appears some organizations disagree. In a recent study (pdf) conducted by Frost and Sullivan for my company, Pegasystems, less than a quarter (20 percent) of the 437 global senior executives surveyed said they view business agility as an essential part of their business strategy, while only 43 percent currently classify themselves as agile adopters. This is despite the fact that those who have chosen to adopt an agile approach have reported a wide range of benefits, including significant increases in revenue growth (84 percent), profitability (78 percent), customer acquisition (78 percent) and customer retention (77 percent). Meanwhile, over 80 percent of respondents who classified themselves as strategic agile adopters (those for whom agility is an essential part of their strategy) rated overall customer satisfaction and quality of customer experience higher than their industry counterparts, and their level of satisfaction with their performance across eight key business metrics (including product quality, business-IT collaboration and team productivity) was an average of 25 percent higher than that of nonstrategic adopters.

So what’s the problem? For many, it appears to be a reluctance to embrace risk. Asked why they hadn’t moved to an agile approach, 43 percent of respondents cited a lack of experience with agile methods, and 41 percent said that agile practices are too costly for the expected rewards. In other words, there’s a worrying number of organizations that are too conservative or risk- and cost-averse to invest in a model of strategic behavior that could have a big positive impact on their business.

The Problem Starts at the Top

Think about that for a moment. It’s the rough equivalent of a man drowning at sea refusing to take a life jacket because the material might not be sturdy enough or the crew might decide to charge him for wearing it. Perhaps most worrying of all is that this behavior seems to be driven from the very top of the organizational pyramid. Indeed, it’s telling that almost half (47 percent) of the participants in our study said a lack of executive sponsorship is behind their failure to adopt business agility practices.

The truth is business leaders need to stop playing a cautious game and take a step back to look at the bigger picture. Sure, by focusing on the bottom line, your business might avoid taking a short-term hit (though there are no guarantees). But senior executives must also ask themselves whether such inherent conservatism, allied with a steadfast refusal to embrace any sort of risk is really the best thing in the longer term. As the saying goes, “nothing ventured, nothing gained.” That’s a phrase that many decision-makers would do well to heed.

My advice to any organization would be to reject piecemeal tactical thinking in favor of taking a wider view. Don’t be scared to think strategically. Instead of taking each move on the chess board as it comes, enable your business to think several moves ahead by making it flexible enough to react to sudden changes you might not see coming.

The benefits are clear: Increased customer satisfaction, greater collaboration between IT and the business and even superior product quality are just some of the long-term benefits that could emerge as a result of adopting an agile approach. What are you waiting for?

About the Author

Don Schuerman is CTO and Vice President of Product Marketing at Pegasystems, responsible for Pega’s industry-leading platform and CRM applications. He has 20 years of experience delivering enterprise software solutions for Fortune 500 organizations, with a focus on digital transformation, mobility, analytics, business process management, cloud and CRM.

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